They tell us we all benefit from made in China products, but how true is this? They act as if China were the only game in town and no other country could manufacture our goods. Are we to assume that attaching logic units into iPad frames is beyond the ability of people from Mexico, Vietnam , Bangladesh or even the USA?
Of course it is not, but Apple does not say this, after all they have to keep the communists happy and the way to do this is through job creation. Thus companies convince us that we must engage China, although it is not entirely true.
As a matter of fact, Chinese imports to the US contributed very little to our economy and GDP (1). In other words, if we cut off all trade to China, the impact would not be tremendous.
Big business propagates the “we need China” myth in order to pad their pockets. They hand over our most sensitive secrets as they convince us that China is not that bad. The ditch US businesses are digging will pave the way to our economic demise.
But what about our government, the one that’s looking out for our best interests? They are similarly positioned. Fearful of offending both China and big business, Washington is happy to watch China siphon off our competitive edge. Rather than call the Chinese on this, Washington prefers to “engage them” and hope for the best.
What Can US Citizens Do?
While no one wants a trade war, America has to stand up for itself. After all, what good does free trade do us if we doom our economy in the process?
Clyde Prestowitz argues that we are playing tennis while China is playing football (2). We assume that the Chinese will abide by the rules of the game, but do not know the game they are playing.
He says that among other things the US must get even with China. In other words, we have to play by the rules of their game. If China steals from us, then there have to be consequences. Unequal trade barriers need to be destroyed or dealt with in kind and our government needs to push for this.
As for us, we can vote with our pocket books and support those politicians willing to get tough on China.
First off, you can inspect your stock portfolio for Chinese companies and decide if you want to support them. Many of those companies are actually owned by the state or communist party and benefit from IP theft. Pulling your money from those stocks will send a clear message. You can also do the same with any mutual funds you own. Tell your broker that you do not wish to support Chinese companies listed in the US and rid your portfolio of them.
You can also send letters to companies such as Microsoft and GE explaining that you disagree with their politics. Off-shore research and development is not beneficial to the US and our workforce. Tell them that you do not want your investment dollars to fund Chinese technology theft.
You can also support a congressman like Mike Rogers, who has historically been tough on China. Let your representatives know how you feel and that you are worried about US prosperity.
Confronting China May Not Be the Best Idea
Big business warns us that confronting China will cause a trade war and others say tread lightly because Beijing holds so much debt.
What they are suggesting is that we continue with the status quo. The harsh truth, however, is that we have two options. We can wait, allow China to steal and watch our competitive position wither away, or take action.
If we follow the first path, we may lose so much that we are in no position to bargain; if we act, we may be able to force change. By doing nothing, however, we send a strong message to Beijing that we tacitly approve of what they are doing and consider it little more than a “China tax” we must pay.
Let’s hope that if and when we confront the Chinese, they act more responsibly then they did in the past. After all, it only takes one vocal person to question the status quo and demand change.